Protective Tariffs

National governments have used tariffs for two purposes. One is simply to raise funds for government operations. This purpose is not controversial. The other is to increase the cost of imported items relative to domestically manufactured ones. Tariffs imposed for this purpose are known as protective tariffs, and have always divided opinion between consumers of imports, who have opposed them, and manufacturers, who have benefited from them.

In the first session of Congress in 1789, James Madison was an acknowledged leader. Sitting in the House of Representatives, Madison used his influence to create compromises between the desires of northern manufacturers and the southern regions, from which he came, which was consumers of manufactured imports and exporters of raw materials, saw a protective tariff as a penalty on themselves.